Chitosan (CS), a naturally occurring polysaccharide obtained through partial deacetylation of chitin, has emerged as a multifunctional biomaterial owing to its distinctive structural, functional, and chemical properties. The reactive amino and hydroxyl groups present in CS enable different chemical modifications as derivatization, which facilitate precise alteration of biological and physicochemical properties, ideally adopting any application field. Hydrophilic or hydrophobic derivatization of CS enhances hydrogel formation potential, anticoagulant, antibacterial and hemostatic activities. The integration of CS chains with graphene oxide (GO) nanosheets is an effective approach to create hydrogels that exhibit significant potential for applications in biomaterials and as creative soft materials within environmental sciences. Fundamental technological attributes, including solubility behavior and viscosity, determine the influence of molecular characteristics and processing conditions on the performance of CS. Moreover, its biological activities as antibacterial, antioxidant, and anti-inflammatory properties enhance its multifunctional potential. The antibacterial actions of chitosan nanoparticles (CSNPs) are highlighted considering their potential application in combating brucellosis. Collectively, these aspects highlight the significant potential of CS and its derivatives for applications in advanced technology and biomedical fields.